Investors grab JMMB shares
Investors grabbed up close to three quarters of Jamaica Money Market Brokers’ (JMMB’s) preference share offer in the first two days.
Up to 2:30 pm yesterday, JMMB tallied $1.51 billion in applications with three more days left for the offer to issue $2.075 billion in preference shares to stay on the table.
JMMB group CEO, Keith Duncan said the half-way mark, or just over $1 billion, was reached on the official opening day.
“Given declining interest rates, I’m happy that clients and the wider investing public see this is a good investment opportunity to invest for a better 2011 and onwards”, said Duncan in a press statement issued on Monday. “Even more importantly, the return which will be earned on this Preference Share is income that clients can plan on each month for the next five years.”
JMMB hoped to raise $1.2 billion from the issue of 400 million preference shares to existing clients and preference shareholders at $3 a share, carrying an interest rate of 8.75 per cent, and another $875 million from the open market through the issue of 250 million shares at $3.50 a share and interest rate of 8.5 per cent a year.
Government paper still carries rates of 10 per cent and higher, but the preference shares provide an attractive alternative due to its monthly dividend payment compared to a quarterly payment made by the government.
Furthermore, JMMB plans to the list the shares on the Jamaica Stock Exchange (JSE), which will give investors the ability to liquidate more easily while given them the added opportunity of seeking capital appreciation on the stock.
The share offer closes in on Friday at 4:00 pm.
JMMB plans to use the funds raised from the share issue to continue its business line diversification strategies across its three territories — Jamaica, Dominican Republic and Trinidad & Tobago — as well as expand into new markets such as CAFTA and explore new acquisition targets, both locally and regionally.
For the six months ended September 30, 2010, JMMB saw its net profit increase 25 per cent over year-earlier levels to $454.7 million.
